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Consumption sector stocks offer some characteristic intrinsic values in real terms because they have the biggest exposure in rural, urban and semi-urban India. Consumption sector stocks become the best investment options for long term wealth creation.
The Covid induced lockdown disrupted supply for the entire consumption sector in India. Though the disruption for staples was limited for a month, discretionary and ‘out of home’ consumption products supply remained interrupted for at least a quarter.
Moreover, demand conditions for discretionary and out of home consumption was also dismal for H1FY21. With the lockdown completely ending, we believe there will be huge pent up demand for discretionary categories (skincare, cosmetics) within FMCG in H2FY21.
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The consumer durable sector is expected to witness a surge in volumes with pent up demand for washing machines, dishwashing categories. Further, almost three to six months delay in repainting activity would lead to pent up sales for paint companies. Moreover, government stimulus and lower interest rate is also resulting in an improvement in demand conditionsfor many products. Trade analysts believe lower interest rates would lead to an improvement in demand for residential houses, subsequently leading to an increase in related consumables. moneyinvestors.in/consumption-sector-stocks/
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